Archive for November, 2013

Over the years, my background in IT marketing and product management has brought me close to the subject of how a software should be extended to new channels. I can recall at least five occasions on which I’ve been involved with spec’cing channel support in the past 15-odd years:

ERP in Branch Office in the mid ’90s

Internet ERP in the late ’90s

Electronic Bill Payment in the mid ’00s

Mobile Banking in the late ’00s, and

Social Media Sales and Customer Support in the last one year.

On each occasion, the initial expectation of the market was identical: The software must do everything on the new channel that it did on all the old channels. Attribute it to customers affected by hype or consultants sitting in ivory towers or whatever, but a software gained legitimacy to its claim of supporting a new channel only when it permitted every step of every business process to happen on the given channel. Let me call this the “multichannel support” wave.

In each instance, it took a few years for the market to appreciate that each channel had its own strengths and accept that there was nothing wrong if the software only supported those features that played up to the strength of the respective channel. For example, since Internet was a great way to extend an ERP to customers, suppliers and partners without requiring specialized hardware or leased lines, it became okay for ERPs to only support marketing, sales and channel processes via the web to begin with.

Soon thereafter, the market recognized that there was no point in making the software support a certain feature on a certain channel when the corresponding business process wasn’t likely to happen on that channel. Out went “web-enabled MRP” from an ERP’s production module, for example.

It took a while longer for customers to understand that their internal and external stakeholders don’t think so much in terms of channels as overall user experience. And for vendors to respond by offering superior UX by splitting a single business process across multiple channels in such a way that each channel leveraged its strength and the customer found each hop natural. I call this “omnichannel support”. Or “interconnected retail”, as Home Depot’s CEO Frank Blake calls it in this FORTUNE magazine interview to describe “as seamless an experience as possible for you as a consumer, whether you’re interacting online or in the store.”

To take “buy mortgage product” as an indicative business process in the context of a retail bank, omnichannel would translate to the following steps on different channels:

Mobile: Hear about a new low-interest mortgage product from a friend on social media

Desktop: Check out the online buzz about this product, visit the bank’s website to learn more about it

Branch: Find out the finer points of this product, sign up for it, fill forms, and submit documentation.

As I’d highlighted in Jumping On The Omnichannel Banking Bandwagon, multichannel banking is neither necessary nor feasible in most cases and omnichannel banking is the practical way forward for most banks. I recently noticed that omnichannel commerce also fits in nicely with the new buyer journey postulated by McKinsey.

Once all key processes are omnichannel-enabled, or even in parallel, I envisage the next wave of channel support in which a bank develops new functionality that exclusively leverage the strengths of a given channel. For example, Mobile Remote Deposit Capture and ATM Driving Directions, which are features that exploit camera, GPS, accelerometer and other standard smartphone features that are absent from all other channels. For the lack of a better expression, let me call this “omniplus commerce” for now.

As the example of @SwitchPay shows, it’s possible to restrict access to your tweets and “complete” profile only to “confirmed” followers.

When I clicked the “Follow” button to send a request to follow @SwitchPay, I saw a fleeting message saying that my request was sent for approval. The Follow button turned to Pending. I’m not sure what criteria the company uses to approve follow requests but suffice to say that I haven’t heard back from @SwitchPay. Since its profile page says it has “0 FOLLOWERS”, my experience doesn’t seem to be unique.

When you need to dot your tweets

When you start your tweet with a Twitter Handle, be aware that your message will be seen only by the owner of the said Twitter account and its followers who also follow you. If you want your tweet to reach a wider audience, prefix it with a “.” or some such character, as illustrated below.

.@BajajAllianz is a rare example of a company that takes social media feedback positively instead of immediately going on the defensive.

If you thought only leaders need to be of a certain minimum age, think again.

Presenting @AnheuserBusch, @Heineken and @Budweiser – the partial list of liquor companies you can follow on Twitter only if you’re older than the legal drinking age, which is 21 in the USA and 25 in India.

Just to check how these companies verify age online, I took Heineken as a test case. After signing on using a Twitter profile that didn’t include age, I hit the Follow button on @Heineken. Like with any other account, I saw the button change to Following immediately. I was tempted to conclude that age verification was a sham but that proved not to be the case. Soon thereafter, there was an email from Heineken in my inbox asking me to click a hyperlink to verify my age and informing me that I’d lose my Follower status if I didn’t act within 24 hours.

When I clicked the link, I was taken to Twitter’s age verification page, where I had to declare my date of birth. Some might argue that this step could be gamed by entering any random date but the same could be said of websites that contain even more age-sensitive content.

Maybe Twitter has been having the aforementioned features for a while, but I just happened to notice them.

At an event held in New Delhi earlier today, Gayatri was declared as the National Winner of the Doodle for Google contest!

According to Google India, the fifth edition of the D4G design competition received 150,000 entries from more than 1,500 schools across 100 cities. The theme for this year’s contest was ‘Celebrating Indian Women’.

The home page of Google India (www.google.co.in) will feature Gayatri’s winning Doodle on 14 November (Children’s Day).

For all those who voted for Gayatri, a big thanks, without which she couldn’t have achieved this feat.

Updates from 13-Nov-2013:

This event has received wide coverage in print, TV and online media. A partial list of articles is given below:

In Mobile Wallets Should Fix What’s Broken – And It Ain’t Payments, we saw why consumers were more likely to try out mobile wallets for store loyalty cards than debit or credit cards.

In this post, we’ll go beyond initial adoption and see where these two mobile wallet use cases – “mobile loyalty” and “mobile payment” respectively – stand with respect to sustained usage.

On that count, early adopters will be forced back to plastic if not enough merchants accepted mobile wallets or they found mobile wallets cumbersome, or both. Therefore, merchant acceptance and user experience are two critical success factors for the ongoing use of mobile wallets.

Let’s see how mobile loyalty compares with mobile payment on these CSFs.

Merchant Acceptance

By the very nature of a loyalty program, no one will complain if their loyalty cards are “misused” by someone else, so loyalty card transactions don’t need a signature or PIN. Since many retailers don’t insist on swiping or dipping plastic loyalty cards, consumers can earn rewards by simply reading the loyalty # off of their loyalty app. Therefore, mobile loyalty apps will enjoy sustained usage even if a merchant can’t or won’t install special equipment required to read loyalty card details off of smartphone screens.

On the other hand, in-store plastic debit and credit card transactions require PIN / signature and swipe / dip. Merchants have invested in the requisite infrastructure for handling plastic payment cards decades ago. For them to now consider accepting mobile payments, they need to invest in additional equipment to scan payment cards off of smartphones (via NFC, QR code or Bluetooth or equivalent). That’s a big hurdle for widespread adoption of mobile payments. As if that were not enough, merchants also have to contend with higher processing fees for accepting mobile payments since such transactions are classified as Card Not Present, which attracts higher interchange rates. Therefore, merchants face a double whammy while accepting mobile wallets for payments.

User Experience

In-store use of both mobile loyalty and mobile payments entail the user to fire up the app and select the appropriate card from among the many cards saved on the app. The time taken for these steps depends upon highly variable factors like the smartphone model and the number of cards saved on the mobile wallet. As a result, the jury is out on whether mobile wallets slow down the in-store checkout process or not.

That said, the very nature of loyalty programs makes it easier to mitigate potential checkout delays since there’s only one loyalty card that’s ‘appropriate’ for a given store e.g. Subcard at Subway or PAYBACK at Big Bazaar. A location based mobile wallet app like Apple Passbookcan save time by automatically selecting the correct loyalty card at a given store location. The same is not so straightforward in the case of a payment card where any (open loop) card would work at any store, thereby undermining the notion of ‘appropriate card’.

The above comparison makes it clear that mobile wallets fare better on both merchant acceptance and user experience when they’re positioned at store loyalty cards rather than debit or credit cards. This signals a brighter outlook for sustained usage and mainstream adoption of mobile loyalty as against mobile payment.

My daughter Gayatri Ketharaman is one of the twelve finalists in the latest Google for Doodle contest on the subject “Celebrating Indian Women”. Her entry titled “Sky’s The Limit For Indian Women” is displayed below:

Gayatri Ketharaman's Doodle For Google

Please click the following link to vote for her Doodle so that my daughter wins this contest.

My leather wallet wore out recently. With so much buzz around mobile wallets, I was wondering if I should even bother with another leather wallet.

Before switching to a mobile wallet, I inventoried the contents of my wallet and arranged them into the following two piles:

LHS: This pile contained payment related items such as cash, two credit cards and one debit card.

RHS: All non payment related items went into this pile. A partial list of contents included many store loyalty cards, two driving licenses, one paper receipt, one health insurance card and one alumnus card.

It was immediately obvious that the pile on the right was much larger than the one on the left. Look like it’s no different for most people: According to this PandoDaily article, “Physical wallets, pockets, and purses… carry a wide variety of items, from cash and credit cards to coupons and boarding passes.”

Looking at the plastic payment cards on the LHS, I realized – like many others – that nothing is broken with them. It’s no big deal carrying two credit cards and one debit card. Even people who use many more cards than me on a regular basis can always choose to leave a few of them behind at home. This is possible because payment cards are interchangeable, which means any (open loop) card will work at any store. For eons, I’m used to handing over my plastic cards at checkout or doing the swipe, dip or tap action myself where the merchant allows it. Therefore, I don’t see a compelling reason to change the way I use my payment cards.

On the other hand, plastic loyalty cards on the RHS are a major source of pain. First of all, there are too many of them to fit in my wallet. I can’t take an arbitrary decision to leave some cards behind since I’d lose rewards when I shop at those stores. Barring a few coalition cards like PAYBACK and NECTAR, loyalty cards are not interchangeable across stores. Secondly, I forfeit rewards on shopping done by others in my family at a certain retailer when its loyalty card is in my wallet.

These are pain areas worth resolving. Mobile wallets fit the bill perfectly. All of them obviate the need to carry multiple cards. Some like KeyRing allow users to scan a single loyalty card into multiple smartphones, so they can earn rewards whenever any of their family members go shopping.

While I still need to go out and buy another leather wallet, I can avoid cramming all my store loyalty cards into it by moving them to a mobile wallet. I can already hear people suffixing the last sentence with “provided merchants accept loyalty cards off of smartphones”. I agree that that’s not a given. But, in the next part of this post, I’ll explain why merchants are lot more likely to accept mobile wallets for loyalty – rather than payment – cards. Watch this space.